Polymarket Study Finds 3.14% Drive Accuracy

Key Takeaways:

Using a statistical method called a sign-randomization test, the authors classified traders into distinct groups based on whether their profits reflected genuine skill or random chance.

Only 3.14% of Polymarket accounts qualified as skilled winners. These traders earned persistent profits that held up out of sample, traded across an average of 79 markets each, and consistently positioned in the direction of final outcomes. The remaining 96% of accounts either broke even by luck or lost money.

The authors found that skilled traders’ order flow predicted both next-period price changes and final market outcomes at statistically significant levels. A one-percentage-point increase in skilled net buying corresponded to an 8 basis point increase in the probability of the correct final outcome. Lucky winners, despite posting positive account balances, showed no meaningful predictive power in either test.

Researchers identified 1,950 accounts that met timing and conviction criteria, suggesting they traded on non-public information. These accounts averaged roughly $15,000 in profits each and had large price effects when they did trade. One documented case involved three accounts that took positions in a contract tied to Venezuelan President Nicolas Maduro hours before a secret U.S. military operation on Jan. 3, 2026, collectively earning more than $630,000.

The majority of participants, the study found, funded accuracy rather than produced it. Unlucky and unskilled losers made up 67% of all accounts and absorbed the entirety of aggregate losses. Market makers and skilled takers together represented fewer than 3.5% of accounts but captured more than 30% of total gains.